Randall Enterprises is considering a capital expenditure proposal that will cost $20,000 and yield an expected after-tax cash inflow of $5,000 each year for 6 years. There is no expected salvage value at the end of the life of the project. The after-tax net cash inflows for each year are expected to be normally distributed with a standard deviation of $800. The company's weighted-average cost of capital is 10%.
Required:
Compute the expected net present value of the capital expenditure proposal.